A Los Angeles Fashion District underwear importer is expected to be sentenced Wednesday for federal offenses linked to a scheme to launder money belonging to Mexican drug cartels.
Xilin Chen, 59, owner of Yili Underwear and Gayima Underwear, pleaded guilty in June 2015 to three felony counts pursuant to a plea agreement that requires him to forfeit hundreds of thousands of dollars in assets and will probably result in the loss of his U.S. citizenship, according to the U.S. Attorney's Office.
In the agreement, the Temple City man acknowledged he received bulk- cash payments at his business that he had reason to believe were from illegal drug activities, but avoided learning the truth about the money. The importer admitted that on three occasions he accepted bulk cash as payment for apparel from an undercover agent posing as someone with links to narcotics traffickers.
Chen pleaded guilty in Los Angeles federal court to knowingly passing false documents filed with U.S. Customs and Border Protection, conspiracy to launder money, and unlawful procurement of citizenship. Prosecutors are recommending a ``time-served'' sentence, followed by three years of supervised release to include up to 12 months of home confinement.
Chen's 28-year-old son, Chuang Feng "Tom'' Chen, also pleaded guilty to conspiracy to passing false documents. The status of his case was not immediately known.
As part of the case, the Chens agreed to forfeit proceeds from the sale of their building, which houses their underwear company; two houses in Temple City; and more than $435,000 seized by federal agents.
According to the plea agreement, prosecutors asked U.S. District Judge Percy Anderson to dismiss charges against Xilin Chen's daughter, Aixia Chen.
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The investigation into Chen's companies was part of a larger investigation into black market peso exchange schemes in downtown L.A.'s
Fashion District. In September 2014, more than 1,000 agents swarmed the district to execute search-and-seizure warrants. Dubbed "Operation Fashion Police,'' the raids netted more than $90 million in cash packed in banker's boxes, shoe boxes and duffel bags, authorities said.